FERC MACT Strategy: A Roadmap for Reliability or Mayhem?

In March 2011, US EPA created a regulatory and political firestorm when it published

Boiler MACT rule (requiring Maximum Available Control Technology be used in boilers, incinerators and power generation plants);the rules set emission limits to reduce the effects of Hazardous Air Pollutants (HAPs) generated by industry from boilers and process heaters located at universities, in small municipalities, food product processors, furniture makers, federal facilities, and many categories of manufacturers;

Non-Hazardous Secondary Materials Definitions Rule under the Resource Conservation Recovery Act determining which materials are wastes and thus covered under the CISWI rule when burned);

Boiler GACT (Generally Achievable Control Technology for boilers at smaller sites). These four rules often are collectively referred to as the “Boiler MACT rules.”

That EPA was considering such rules was no surprise to anyone as these issues have been around for years. But the firestorm was created by the shear breadth of the rulemakings and the short timelines for compliance. Taken together these rules put at risk hundred of businesses, thousands of jobs and the re-election prospects of hundreds of politicians.

Critics said US EPA was pursuing a virtual war on fossil fuels which are used to fuel most of these boilers and was tone deaf to the hardship and adverse economic impact the rules impose of an economy struggling to regain strength enough to grow again. EPA responded with its usual and customary defense: we don’t write the laws that require all these regulations we just try to enforce them.

The industry response was immediate and loud! This is like open heart surgery without anesthesia then telling the patient he has to go back to work to pay the surgery bill before he can recover from the procedure. NERC—the National Energy Reliability Corporation—responsible for coordinating power grid security and reliability fired back that these actions undermine power grid reliability and were not in the public interest. The Forestry Council representing pulp and paper industry interests issues a similar inflammatory report says 20,000 good paying and mostly union industry jobs were at risk.

Attempts in Congress to overturn or delay implementation of the rules have to date failed setting up the perfect scenario for politicians on both sides of the aisle running for election. For environmental minded groups the reaction is —it is about time you stopped this pollution! For business and some labor interests the reaction is—We can’t even get through the required environmental review process in the short window we have been given to comply. And to continue the environmental review we must admit that we are guilty of violating the law by releasing these named pollutants thus subjecting us to endless litigation, penalties and public ridicule. The ultimate GOTCHA! The only choice we have to remain in compliance is to shut down the facilities. To which the environmental advocates and the US EPA say—precisely, what’s the problem with that?

The politicians on both sides are at the sidelines with their hand out. Give me money to win re-election and I promise to fight (for these rules) or (against these rules) depending upon who they are talking to. This is the dirty little secret of our political and regulatory strategies in Washington. Volatility is a wonderful thing for politicians and political fund raisers because it ignites the passions on all sides of these questions. Congress writes laws so vague no one know what it will require to comply so Congress evades accountability for its actions. Federal agencies are forced to divine the intent of Congress or they merely substitute their views about that the rules should say and do. When citizens complain about the rules Congress can blame the Federal Agencies for the mess they themselves created. This may not be what the Founders intended for our representative democracy but it is what we are stuck with at citizens, businesses and special interest groups.

Calls have been growing for FERC to step in and assert its jurisdiction over electric power grid reliability issues. The FERC staff issued a whitepaper on February 6 2012 trying to avoid being trapped into acting before the election but still looking like it was doing something constructive in the meanwhile. The FERC whitepaper seeks to define how FERC might apply the options given it under the proposed rules and Federal law to grant time extensions for compliance for “critical facilities” needed to assure grid reliability. Comments on the white paper will be accepted at FERC until February 29, 2012, at the eFiling link on the FERC web site.

But FERC cannot help the hundreds or thousands of boilers or incinerators not subject to its jurisdiction—they are on their own dependent upon their politicians and K Street lobbyists to defend them. Good luck with that!